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Saturday, 17 April 10
DRY BULK SHIPPING MARKET ANALYSIS - BIMCO
 Strong Chinese steel market is set to cushion the flood of new Capesize vessels entering the dry bulk fleet Demand: The first quarter of 2010 saw ups and down for the BDI with the index hovering around 3,000. It seems as if the market is balanced on a knife edge. High supply is likely to overmatch even very healthy demand growth rates – strongly dependant on China.
Chinese iron ore imports continue to remain firm. In the first quarter of this year, China has imported an average of 51.68 million tons (mt) of ore. In 2009, iron ore imports reached a monthly average of 52.37mt, leaving this year’s ore imports just 1% short of 2009 levels, but still very healthy at 14.7mt (40%) more than 2008 levels. With steel prices rising above those of 2009 – Chinese iron ore imports will continue as the prime driver in the dry bulk market.
However, the present spot rates are not expected to stay that low as time charter rates stay strong as illustrated by the reported BHP Billiton booking of a Capesize vessel for 3-5 months at USD/day 37,000 - more than 30% premium to spot. The current FFA (Forward Freight Agreement) rates also point in that direction with Capesize Q2 FFA going up to USD/day 35,750 and Panamax Q2 going down to USD/day 28,500.
Supply:
The active fleet has grown by 3.5% during first quarter of 2010, caused by deliveries of 16 million DWT of newbuildings offset by just 1 million DWT being demolished. Since BIMCO Bulletin 1/2010, the total dry bulk order book has increased by 5.5 million DWT. It seems as though the optimism from surprisingly healthy freight rate levels in 2009 has made contracting go on – despite the fact that the 285 million DWT that comprises the order book today is doomed to make challenging markets in short as well as long-term.
Year-to-date deliveries in capesize amount to 47 ships comprising 8.7 million new DWT, resulting in an increased fleet size of 5% so far in 2010 and active Capesize vessel number 1,000 has just been delivered. At the beginning of 2009, 822 Capesize vessels were active, but an inflow of 112 newbuildings and 29 converted vessels was added to the existing fleet, counterbalanced by just 9 demolitions, leaving a fleet tonnage growth of 18.5% in 2009.
An additional 305 Capesize vessels are scheduled for delivery in 2010, but “only” 183 will hit the water, when applying the BIMCO assumptions for supply forecast as described next to the graphics. In total, this will in turn mean that Capesize tonnage could grow by 21% when fine-tuning for an average scrapping age of 26 years for Capesize vessels
as compared to the average of 30 years for the overall fleet.
BIMCO forecasts inflow of new dry bulk tonnage in 2010 to reach 76 million DWT, offset by demolition of as much as 13 million DWT. This could make the fleet grow by 14% in 2010 as compared to 10% in 2009. Deliveries in 2011 are forecast to be even higher before supply growth comes down in 2012.
Clarkson’s have scheduled deliveries of 120-130 million DWT in 2010. BIMCO assumes that 10% of the entire order book will not be built and one third of the rest will be deferred by one year. Furthermore, the demolition potential is calculated to 49 million DWT, equal to all vessels aged 30 or above to be demolished by the end of 2013.
Outlook:
The fortunes of the dry bulk markets are basically down to the fortunes of China. March was the 13th straight month that the official Chinese PMI (Purchasing Managers Index) has stood above the threshold of 50 that demarcates expansion from contraction, indicating that the Chinese economy is on a stable and relatively fast growth track. PMI rose to 55.1% in March, up 3.1% on last month, according to data released by the China Federation of Logistics & Purchasing.
The housing market and huge infrastructure projects have been primary beneficiaries of the Chinese Government’s stimulus package. With the construction sector being the number one steel user, consuming around 50% of Chinese steel, it goes without saying that a continuance of the strength in this sector is vital for the health of the dry bulk freight rates.
Freight rates are forecast by MSI to drift sideways on current levels over the next 6 months. Capesize rates are forecast to stay around USD 30-35,000 per day while the smaller vessel types could see rates go down from current levels to around USD 16-24,000 per day.
Current news:
BHP Billiton has reached agreement to sell the majority of its iron ore to Asian steel mills on shorter term contracts, ending more than 40 years of annual pricing. Brazilian Vale have also inked new iron ore prices – resulting in price hikes of around 90%– indicating a continued strong demand for the vital raw material in steel production. Contract prices for coking coal are also expected higher.
Meanwhile, the China-Rio Tinto bribery case has just been settled. The court in Shanghai sentenced the four convicted Australian mining giant Rio Tinto employees to prison for a total 39 years. They were found guilty after having admitted to accepting about USD 13 million in bribes from private steel mills that wanted to avoid purchasing iron ore from more costly state-run mills. The arrangement undercut the state’s China Iron and Steel Association’s desire for a united front in negotiating with Australian suppliers. Shortly after the verdict the employees were sacked for clear violation of Chinese Law and Rio Tinto’s code of conduct. China claims its steel sector paid as much at USD 160 million too much last year for iron ore because of bribery and espionage. While the three Chinese defendants have decided to appeal terms, the Australian national Stern Hu appears to be the only one not appealing terms.
Source: Bimco / Hellenic Shipping
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Wednesday, 02 June 10
PLN TO DEVOUR 133 PERCENT MORE COAL IN NEXT FIVE YEARS
The Jakarta globe reported that, State electricity company PT Perusahaan Listrik Negara will more than double the amount of coal it uses over the ne ...
Tuesday, 01 June 10
LANCO INFRATECH PLANS POWER PROJECTS IN COASTAL REGIONS
My digital reported that, Hyderabad-based Lanco Infratech will set up power projects in coastal regions based on imported coal. The company is ...
Monday, 31 May 10
NEWCASTLE WEEKLY EXPORTS RISE; SHIP QUEUE SHORTENS
Business week reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel used in powe ...
Saturday, 29 May 10
FREIGHT MARKET SEEMS TO BE STABILIZING - CAPT. REDDY
COALspot.com: The week was clearly for Cape which went up by almost 21 pct . The BDI was up only by 6 pct.
The other sectors were under pressure ...
Friday, 28 May 10
BERAU COAL GROUP SEEKS US$ 700 M LOAN
PT Bukit Mutiara has decided to revise down its bond issue from US$600 million to US$400 million. In total, it is seeking US$700 million of debt, co ...
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- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- PTC India Limited - India
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
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